The Lincolnshire County Council Pensions Committee met on Thursday 15 October 2026 to discuss the Pension Fund Update Report, the Annual Fund Performance Report, and the TPR General Code Annual Review. Key discussions included the second extension of the investment consultancy contract and proposed changes to the Council's constitution.

Pension Fund Update Report

Jo Kempton, Head of Lincolnshire Pension Fund, presented an update on Fund matters for the quarter ending 30 June 2026. The value of the Fund's invested assets increased by £281.7m to £4,187.7m. The funding level improved from 110% to 119%, largely due to investment gains. A breach was reported regarding the late administration of the McCloud Remedy, which has been reported to the Pensions Regulator (TPR). The committee considered a recommendation for the second extension of the investment consultancy contract for two years, to 31 December 2028, acknowledging it could be terminated earlier if Border to Coast Pensions Partnership (Border to Coast) is able to fully undertake its role as primary advisor.

Report by the Independent Chair of the Lincolnshire Local Pension Board

George Graham, Independent Chair of the Lincolnshire Local Pension Board, provided an update on the Board's work. He highlighted the Fund's high degree of regulatory compliance, particularly in preparations for Fit for the Future reforms. However, he also noted a weakening in elements of the control environment around the pensions administration service, reflected in internal audit reports. The Board will be following up on these issues.

Pensions Administration Update

Matt Mott from West Yorkshire Pension Fund (WYPF) presented the quarterly report on pensions administration. While most Key Performance Indicators (KPIs) were met, some targets were missed due to additional checks required for McCloud remedy cases, staff vacancies, and delays in software provision from Civica. WYPF has implemented a new software solution and recruited additional staff, which is expected to improve performance. The report also detailed staffing updates, budget forecasts, and progress on the Pensions Dashboard. A control deficiency was noted regarding the segregation of duties for manual journal postings, attributed to the council's ERP system functionality, with compensating controls in place.

Annual Fund Performance Report

Jo Kempton presented the Annual Fund Performance Report, covering the 12 months to 31 March 2026. The Fund's ten-year annualised return was 7.9%, slightly behind the benchmark of 8.5%, but ahead of RPI and public sector average earnings. The report detailed performance against the benchmark, peer group comparisons, and cost analysis. Councillor Martin Hill OBE questioned the accuracy of the attendance chart in paragraph 4.5, and Jo Kempton confirmed this would be investigated. The committee discussed the trend of growing underperformance against targets, with Jo Kempton explaining that the overall objective had been revised to reflect liabilities. The report was accepted, with a commitment to review the attendance data.

Annual Pensions Committee Training Plan and Fund Strategy

Jo Kempton outlined the proposed training strategy and annual training plan for the Pensions Committee for the year to July 2027. The Fit for the Future review has updated mandatory training requirements, including the need for a training log. Councillor Martin Hill OBE expressed reservations about the mandatory training log. Following discussion, it was agreed that logs would be pre-filled by officers, and members would sign them off. The committee approved the training plan, subject to this amendment.

Constitution Changes

Jo Kempton presented proposed changes to the Council's Constitution to reflect the new landscape of the Local Government Pension Scheme following the Pension Schemes Act 2026. These changes affect the committee's terms of reference, the responsibility of functions, and rules of procedure. Councillor Jacqueline Brockway raised a query about the wording regarding responsibility for professional service providers, and it was agreed to amend this to responsibility for the appointment and oversight of. The committee discussed the proposed changes, which would then proceed to the Audit Committee and Full Council.

Annual Report and Accounts 2025/26

Claire Machej presented the draft Annual Report and the External Auditor's Year End Report from KPMG. The draft Annual Report was compliant with Scheme Advisory Board guidance. KPMG reported no significant misstatements during their audit and expect to issue an unmodified Auditor's Report. A control deficiency was identified regarding the segregation of duties for manual journal postings, which is due to ERP functionality. The committee considered the auditor's feedback and the draft Annual Report.

TPR General Code Annual Review

Jo Kempton provided an annual update on the Fund's compliance with the Pensions Regulator's (TPR) General Code of Practice. The Fund is generally compliant, with one essential action remaining regarding an updated scheme of delegation, which is expected to be completed in 2026. The report highlighted that the Fund is well-positioned regarding Fit for the Future reforms and that WYPF continues to meet its code requirements. The Pensions Board noted no significant areas of non-compliance.

Attendees:

• Councillor Raymond Balfor Condell (Chairman)
• Councillor Nick Arthur Hastings (Vice-Chairman)
• Councillor Mrs Jacqueline Brockway
• Councillor S Bunney
• Councillor Martin John Hill OBE
• Councillor K A Redfern
• Councillor P J Roberts
• Councillor R Woods
• Steve Larter (Small Scheduled Bodies Representative)
• Jo Balchin (Scheme Member Representative)
• Councillor Paul Key (District Councils Representative)
• Tom Hotchin (Academy Sector Representative)